Anpanman - Hoss, is this your first rodeo? Sure seems like it.

[00:00:06] Speaker A: This is the AST SpaceMobile Podcast.
[00:00:09] Speaker B: It will just basically come to your phone and be seamless regardless of where you are. We don't want the user even to know that it's connected by satellite. Listen, the opportunity that we have is very, very, very large.
[00:00:25] Speaker C: Hey everyone, I thought I'd do an ad hoc space here. Just monitoring Twitter, it's like there's a bunch of new investors out there, amateurs really. So I just wanted to level set people because I think some folks need their levels to be set, right? Which is the title of the space. Is this your first rodeo? Sure seems like it. So yeah, I just wanted to talk about AST SpaceMobile and the current dynamics and obviously sentiment. Obviously the Amazon news yesterday, for whatever reason, has spooked people and has gotten the street all up in their underwear, all tied up. And the reactions I think have been okay to ignorant. And so I just wanted to dive in a little bit on what this deal potentially could mean, but also highlight what's on the horizon here. And so I think it's important to understand that most of us have been invested in this company for 4 or 5 years, and we've seen a ton of stuff come and go, right? Like we've seen when Starlink and SpaceX announced their partnership with T-Mobile, proclaiming that they were going to offer broadband service back in September 2022. Of course, Apple You know, Apple came out with their investment in Globalstar and offered SOS messaging, which has eventually evolved into some limited actual customizable text messages. And of course, you know, Starlink buying EchoStar, which caused the stock to drop, I think it was like 13, 14% that day. And then after 2 days of digestion, the stock rallied from, I think what was like $39 to like $85. You know, just a few weeks later. And so this stuff is going to happen, right? Like this is a highly attractive large market and there are going to be other players pursuing it, right? And you've got these legacy guys, for example, Viasat, Equisys, or I don't even know their name, Space 42, like this battle of the bastards, like a bunch of guys trying to get together to put forward a solution. And by the way, they're like 3 different parties. They're not vertically integrated. Who knows what they're trying to do? It's going to be harebrained. They're spending $1 billion, which quite frankly, you know, that might pay for a few launches, but they're not going to get there, right? And if anything, they're probably trying to create some competitive dynamic where the stock price goes up for ViaSat. They can raise more money and just keep, you know, keep things moving along, hoping for a better day where they can get bought, right, for some premium. But I think it's important to really understand what the Amazon deal means and what's reality. Like, okay, they announced this thing yesterday and everyone's, I think Deutsche Bank had a pretty rational reaction to the announcement, but they did lower their price target because they were like, well, we'll just assume like there's a 15% impact on margins long-term, which, you know, that seems like a reasonable conclusion. But, you know, what, when, what does that mean and when can they compete? Right. So first of all, initially when I saw the press release, I thought, you know, MDA Space might get cut out, right, of building future satellites. So MDA Space is currently building 17 satellites that, which are compatible with the current generation of 24 satellites in orbit. And that's just to replenish and keep the service going. And then they have an order for A next generation satellite, which is based off the Aurora platform. And they refer to it as C3. I think that's like 50 satellites, right? And so they're building and hoping to deploy that sometime in late, maybe it's like, I think 2027, 2028 around there. But initially I thought, oh, well, maybe, you know, just as my gut reaction, I thought maybe Amazon will just cut these guys out and just make their own satellite and deploy it supposedly on this 2028 timeline. But then of course I dug into the deal documents and there's no pointing to a removal of that contract. And so, and then I thought about it more. It's like, oh, you know, from a business perspective, actually makes sense. You know, first, like Amazon and the Amazon transaction, that's going to take time to close. It's probably going to happen sometime mid next year. It's going to go through a very rigorous regulatory review and antitrust review. And so if you're Globalstar and Apple, you're not going to sit around waiting for the deal to close because these things can actually take longer than expected. And maybe the deal doesn't close, which I think is highly unlikely. I think it's going to close as is. But you're going to continue with your plans, right? Because you have to maintain the current constellation. I mean, it's not great, but you have to maintain it. And then you have to go forward with your plans of building the next generation. And the more I thought about it, I was like, oh, you know, actually that makes sense because Amazon is going to use that next generation constellation too, because they're not going to have their satellites ready. Supposedly they said, you know, we're going to start rolling it out in 2028, I think, but they actually meant rolling out service in 2028, which is dependent on MDA Space's constellation, right? Because Amazon, Eventually they'll build their own satellites, but that's going to take time. I mean, we know that they hired, they had one job posting, maybe it was 2 in the last few months where they were looking for someone with D2D RF experience. It's going to take time to build a group of folks who can help them do this. And then as we know, for AST, it took a really long time. They started in 2018. Yeah. SpaceX in 2022 and SpaceX obviously based off of what we see in their service, it's not perfect. It's a minimally viable product, right? And so for AST, you know, they've built this ASIC. They've gone through multiple iterations of, you know, BlueWalker 3 and then Block 1 satellites and then Block 2, which is being rolled out now. And then of course, moving from FPGAs to ASICs. And then Block 3 is already in development and will get launched. And that Block 3 is going to be the equivalent of what, where Starlink and the eventual Amazon constellation play, which is in mid-band. But that takes time and it takes a lot of money, right? And it takes iterating because you can't just do it. You can't just make it and it's going to work. You're going to have to go through trial and error. You're going to have to do development. Spinning up an ASIC, for example, takes 4 to 5 years, right? And I think SpaceX, you know, Elon is pretty aggressive with his timelines, but he's saying that V2 will have an ASIC and that will be ready sometime in 2028. Well, yeah, if development is on time and it's perfect, then it'll be 2028. It could be 2029, right? Then of course you've got, you know, you need Starship to come online and get to your commercial cadence. But For Amazon, starting from scratch, you know, maybe they've done some upfront work and obviously they've, with LEO, they've done development work, but I think people should remember that LEO has taken many, many years, right? And now they are starting to actually, actually, you know, build those in scale and they're launching them. And so from, you know, Chairman Carr referred to this before, like they are way past their build-out deadline.
[00:08:05] Speaker B: Right?
[00:08:05] Speaker C: And so they need to get an extension. Um, let me just ask, let me just find one piece of information here. Sorry guys, I'm trying to find some information because I think it would be helpful for this discussion. But, um, but yeah, Amazon LEO took forever. And so yes, there's, there's learnings there. And they'll be able to leverage those. But as we all know, direct-to-device is a totally different animal than fixed wireless. Fixed wireless, which is leveraging high-band spectrum, whether it's Ka, Ku band, QV band. We're talking about MSS and then potentially cellular, which by the way, Amazon, they bought MSS spectrum today. They don't have access to cellular spectrum. And so While the service will be interesting in terms of some level of data throughput, it's not going to have coverage and propagation. And so, yeah, I mean, I think, let me see, I'm just going back here. So Amazon, I think they launched their first 2 prototype satellites back in 2023. And then of course now they're launching, I guess they started launching production satellites Over, of course, over 2025, but they're, they picked up the cadence now. So, but I think Amazon LEO prior to those 2 test satellites, I think it took several years to get to that point.
[00:09:34] Speaker B: Right.
[00:09:34] Speaker C: And so it's going to take a lot of development work. And so I think it's important for people in the market to understand that what Amazon is doing and what they announced is that they are going to use the current Globalstar constellation, and then they're going to use the next generation C3 Aurora satellites. And leverage that for D2D in 2028. And then at some point in the nebulous future, they're going to develop their own direct-to-device satellite. And, um, you know, how long will that take? You know, are they going to use FPGAs and then eventually spin up an ASIC? Um, of course you can't spin up an ASIC until you've perfected what you want in silicon through an FPGA. And so it, it's a development timeframe, timeframe that, that takes time. And so, um, Yeah. I mean, you're looking at a potential competitor sometime in 2029, 2030. Um, and in the meantime, you know, we've got these things called MNOs. Um, and we have mutual exclusivity with providers like AT&T, Verizon, Vodafone, Rakuten, um, Saudi Telecom, Bell Canada, TELUS. Um, yeah, there's a whole host, like there's 50 of these guys. Uh, we have obviously definitive commercial agreements with a handful for now, because we're, we're still planning to ink those as we roll out the service. But, um, it's not like these guys are passive, right? Like this company called Vodafone and AT&T and Verizon, uh, they all sit on our board. Like we're fully integrated with these guys. Like they're strategic investors, all of them, and they sit on our board. So does Rakuten. And so it's not like, you know, Joe comes lately, is going to come by and be like, hey, do you want to use my service? And then Verizon is going to say, oh yeah, uh, let me give it a try. These companies, we have mutual exclusivity, right? And so, and that's for in Vodafone's case, that's 5 years. And for AT&T and Verizon, you know, that's, that's multi, multi-years, I believe, probably around the range of 3 to 4 years, but not, not entirely sure. And then of course for Rakuten, that's like, I think that mutual exclusivity is, it could be into perpetuity, but I'm not sure. But that exclusivity actually lasts The timing of that, it kicks off at the start of commercial service. And so let's say if commercial service started in October of this year or December of this year, then it's 5 years from that point, right? It's just like when Starlink and T-Mobile have their 1-year exclusivity, it started from the period of when service started. And then of course that's going to end in June, July of this year. And so, you know, it's important to understand that even if Amazon puts together this whiz-bang service, like it's not, there's no ability to, for these MNOs to go carry it because, well, one, strategically, that wouldn't make sense for them. But then 2, they, we have mutual exclusivity with them. And so I think, you know, these fears that somehow Amazon is going to hit the ground running and have some tremendous service in 2028, 2029, 2030. Like that's kind of far out there, right? I think it's unlikely, like if everything goes well, maybe it'll be 2029, maybe 2030. But the other thing which Katzi pointed out quite well, and I alluded to this yesterday, is that the way that these solutions work, right? So Globalstar and Starlink both have solutions that are basically like a separate roaming network. They are completely separate from the MNO network. And so it's not seamless. It's almost like you're roaming on, you know, when you go out of coverage, Globalstar, that little logo will show up and then you can connect to it and send, you know, messages. Or for T-Satellite, if you're the network and then that network kind of fight to see who's going to provide service for your phone and and it's not seamless, but when one drops, the other one picks up, right? However, in AST's case, we are actually integrated into the core of the MNO network. And so the eNodeBs that do all the trafficking between towers actually also do trafficking between towers to the satellite. And so that handoff will be seamless. And in future revisions of NTN standard, that's going to be even more seamless. But when you are fully integrated into the network, the great— the reason why the MNOs want that is they want complete control of the customer. They want to be able to provide all the different services, menu of options. And so for Vodafone versus AT&T, they might offer different plans. They might offer different service levels. And you might get throttled if you have a low-end plan, you might get all-you-can-eat data on a higher-end plan. The pricing might be different. There could be all these different features, but the MNOs want to control that, right? And they, as part of that, you need to be integrated into the network. Whereas like with SpaceX Starlink, Starlink controls all that stuff. And so you as an MNO, you just hand off the customer to Starlink because it's like an eSIM and then they do whatever they do and then they pay you for that customer or some split, which interestingly we saw that. In Starlink's case, I think they only provide 20% of the economics to T-Mobile and they keep 80%, which is another point. It's like, okay, we're actually doing 50/50 and our business model looks great. Starlink is actually offering worse economics. Is Amazon going to impact that? Who knows, right? But the point I'm trying to make is that once you integrate into the core of the network and are seamless with the MNO, Uh, you, you kind of have this position where it's hard to replace you, right? You can't rip and replace out, um, AST, like once you've made that commitment. And, and this is something again that the MNOs want. They want seamless integration. They want to have the ability to control the customer, do support billing, um, provide different service levels. And you can only do that if you're integrated. And so by that time, let's say if Amazon does, you know, they transition away from the Globalstar second generation constellation. and then they developed their own satellite, they've developed an ASIC, and they've successfully launched a constellation. Then at that point, maybe an MNO could be like, oh, maybe I want to switch, but there's switching costs, right? And then let's talk about service levels. So Globalstar, as I mentioned before, they've got like 16 MHz of 2.4 GHz spectrum, or actually it's closer to the upper end of 2.4 to 2.5 for downlink. And then uplink, they've got some L-band, which is 1.6. It's like 7 megahertz. And so that service is okay if you're out in the open and have a direct line of sight. It might penetrate a window if you have a strong signal, but it's not going to give you the same level of experience that AST has, which is cellular spectrum, low band, goes through walls, goes through, has great coverage. And of course AST, when they deploy Legato, then you'll have this on top of that. coverage layer of cake, you're going to have mid-band spectrum, which gives you a lot of capacity, right? But for Globalstar, they're limited to that spectrum. And so just to quantify that, that's about a third of the spectrum that AST is deploying in the US. And it's also a third of what eventually Starlink is going to deploy once they move off of the 1.9 gigahertz T-Mobile and they deploy the AWS-3 spectrum, which they're buying from EchoStar, which by the way, like isn't going to close until the end of the summer in 2027. And then they've got to develop the new satellite, which isn't going to come until 2028. And then of course, by that time, like Starship has to be going, right? And so a lot of things, I mean, we know, you know, Elon Musk and Tesla and SpaceX are tremendous companies and they've accomplished wonderful things. But at the same time, like, As we all know, hard things take time. And so having a timeline where they've laid out that they can get to service for V2 sometime in 2028, like I would probably tack on another year or two. And look, we're just as guilty, like for AST, we're doing something that's never been done. It's really hard and it takes time. And what we thought was going to be some rollout of satellites for launch, which by the way, like BB7 was done in December. And unfortunately, Blue Origin has taken much longer to refurbish Never Tell Me the Odds booster. But then of course, this is their first time doing it. And with all these things, like after the first time you make a lot of mistakes, which I understand there were some mistakes made, but you get better at it. And that's what they're hoping. Like they've learned from this process and they're going to be able to turn these things around much faster. But for, but going back to my original point, For Globalstar, yeah, Amazon's going to rely— it's like the press and research don't understand this. They're going to rely on the existing constellation and then the next generation constellation that MDA Space is building, which we don't really know all the specs yet, but I can pretty much guess that it's not going to be at the same level of performance as AST. They're going to be relying on those until they can develop their own satellites, and that's going to take time. And that's going to be beyond 2028. The other thing I would say is that if Amazon Globalstar want to get to the level of performance that AST is at, they will need to develop a much larger satellite with a phased array that's high-powered. Not to say that they can't do it, but their current satellites are pretty small. They're just like the Starlink fixed wireless satellites. You're meant to have many of those and they are targeting fixed dishes to provide high-band, high-speed, high-band spectrum internet connectivity. That's very different than what direct-to-device is. And so as part of that, it's important to note, let me just look here. Sorry, I'm moving away from my notes here. One thing that I thought about overnight, and I think it was actually in one of these analyst reports, which was a really great point. I didn't think about it. But one thing about Globalstar satellites is that they actually are orbiting at twice the height of AST SpaceMobile and essentially 4 times the height of, of Starlink, right? So for those that don't know, um, Globalstar satellites, they're currently orbiting at around 1,400 kilometers. Um, AST, our shell is going to, you know, depending on the satellites and, you know, it's, it's going to be probably on average around 600 kilometers, uh, 600, 700 kilometers. Um, and so with that, with that, you know, there's trade-offs, right? Like if you orbit closer to Earth, your satellites don't last as long, meaning unless they have enough propulsion, but they're going to decay. Uh, faster. Um, but then you reduce the latency, right? So when those satellites communicate with a device on Earth, there's less, um, turnaround time in terms of sending beamy data up and down. Um, but, you know, with that improvement in, in performance, you also have to have more satellites for coverage because, um, if you can imagine, like, if you're further away from an object, you can see all of it. But if you get closer, you can only see part of it. And so the field of view for these satellites, um, When you're closer to Earth, becomes smaller. Unless, of course, you have a very large phased array, then your field of view is very large. And so AST is there. The sweet spot for them has been, hey, we're going to develop these really large phased arrays. We're going to fly them at 600 kilometers. And we, because they're so large and so powerful and you've got so many array elements on them, you know, 2 satellites, for example, can cover all of, you know, the US, right? In terms of coverage. Whereas for Starlink, they made a different trade. So they actually are flying all their satellites at 350 kilometers. I think it's like not far from the ISS, the International Space Station. And so they're really close to Earth, right? And they're doing that because the phased arrays that they made are smaller and they're weaker. And so in order to make the link budget, the connection between the satellite and the phone, you need it closer to Earth. Um, and, but with that trade-off, you need way more satellites, right? Because your phased array is not that big. I think the current generation's 2.5 meters by 2.5 meters, and ours are 15 meters by 15 meters. Um, but you, you need to be closer in order for that phased array to talk to a phone. Um, and of course, you know, it depends on the power as well. But, you know, if you boost power, you have to be careful because too much power and, and not a highly beamable directed phased array also creates interference and you can't have that, especially when you're operating in bands that are close to either cellular bands, the mid-band area or low-band area. But anyway, but yes, so SpaceX took this choice with Starlink. They're orbiting in the 300s of kilometers in order to get the level of performance they need to to actually talk to a phone. But that trade-off means that those satellites only last, I think it's like 2 to 3 years in orbit. So, so, I mean, which is not a bad thing for Falcon 9 because they need payloads to keep launching up into space. And so, so that's, that's good. Although I guess from an environmental perspective, if you've got thousands of these things burning up in the atmosphere every year, at some point that's going to matter. Um, but you know, that's for another discussion. But for AST, um, given where we're orbiting, you know, those satellites will last anywhere between, call it 5 to 7 years, maybe 9 years on average. But for Globalstar, their satellites are way up higher. They're 2 times higher, more than 2 times higher than AST. So the performance of the current generation, next generation is going to be lethargic, right? Because the response time of communicating with your phone to something that far up, there's going to be potential seconds of delay, which For some data and emergency texting, that's okay. But if you want to do voice, that's no bueno, right? And then if you want to do broadband data where packet loss, you know, certain applications where packet loss or latency is not good, then that's not good, right? And so this is another part of the Rubik's Cube of complexity that Amazon's dealing with by taking over a legacy player, maintaining that service for Apple. Because Apple's like, okay, sure, you take it off my hands. I paid and committed $2 billion on this thing. I'm done with it. It's all yours, but you have to provide me with a guaranteed level of service. And so Apple's like, you know, wringing their hands of this and they're like, thank you, please, you're done. You take it. But for Amazon, the complexity is that they will have to transition from this legacy constellation to eventually at some point, you know, the next generation constellations being built by MDA Space, but then after that, their own satellites, right? And so if Amazon wants to build this from first principles, ground up, do what AST is doing, um, you know, you're going to deal with compatibility issues between the old constellation versus the new one. Perhaps you just shut down the old one, but then if you're Apple, you're like, you're not going to do that. Um, I want you to build the entire constellation and then light it up and then turn off the old one. And then, you know, what do you do with all those old satellites? Because they're all floating up there in space. Like, how do you deorbit them? But beyond that, let's talk about the regulatory perspective, right? So if Amazon goes to regulators and say, hey, I want to put up a new constellation and I want to provide like direct-to-device service, but I want to lower the orbit from 1,400 to 600 or 700 or 500, I mean, you pick, um, that's going to be a very long review process, right? Like they're going to have to go ask to get their, the orbits lowered. Um, and, you know, I don't know what they're going to do with the old satellites, but then, um, that process, I'm not, you know, I'll have to talk to like some FCC people or I guess, you know, quick hand, you know, talk to, um, And AI, but that's going to be pretty complex, right? Like you are transitioning from an old constellation to a newer one. And then you're kind of like trying to build the airplane while it's flying. Like, how do you do that? Right. And so do you, by maintaining your old slots and then asking for new slots that are much lower, is there some type of commitment or adjustments you have to make? And again, there's going to be a regulatory review process. There's also going to be people who are already in those orbits, like at 400, 500, 600, you know, that will have a say in it, right? Like, oh, in terms of orbital collision risk and all these different things, right? And so that's a pretty long regulatory process, which obviously Amazon will probably learn about what they're trying to do in the next few months. Uh, cause they need to start, they need to get going like right now. They need to start that regulatory review process. Um, and lay out their plans of what they're going to do. And so this is all really complex. Like, it's not this whole idea where the market and these, you know, harebrained research analysts are like, well, you know, this is a competitive, you know, this is going to squeeze margins and do all these different things. Well, hey, you guys are getting, you're putting the cart before the horse. Like, let's first think about like exactly when a true Amazon That would be somewhat competitive direct-to-device constellation go up. Like in my guess, it's probably more like 2030, 2031. And so by that time, like, is there a market left? I mean, so when, when Amazon announced in this press release that they were going to, um, develop this service and work with potential partners and MNOs, like, yeah, I would like to too. If I, if I created a new direct-to-device service, um, I'm going to put out a press release and say, I'd like to work with a bunch of MNOs and strategic partners. But that's all talk, like, and actually delivering that, that's tough. But the benefit is that, and you saw this with Chair Carr yesterday, Brendan Carr for the FCC, when he was being interviewed on CNBC, he specifically said, and this is good for the administration, of course, and it's good for regulators. He said, hey, yeah, we would welcome this Amazon deal. we support a facilities-based 3-player market because it'll be good for the consumer, which generally is true, right? When you, and by the way, when someone says facilities-based, that means like this player has physical assets and they can compete at a similar, you know, playing level as the 2 incumbents, which in this case are Starlink and AST SpaceMobile. When they talk about that, it's like in any market, You know, in terms of competitive, there's a Herfindahl index where you talk about how competitive a market it is. And if there's like, you know, 4 or 5 players, that's really competitive. And, you know, DOJ, FTC folks go through this analysis, like in airline mergers or, you know, any merger. You know, wireless, for example, like in the wireless business, when there used to be 6 carriers, it was way more competitive. And then when there was 4, it was, you know, it was pretty competitive still. And then the regulators made a big mistake and allowed, um, T-Mobile and Sprint to merge and then became 3 and then it became way less competitive. Right. And so this is like a, um, this is something that the FCC likes. It's like, oh, okay. Amazon's going to buy, um, Globalstar and it's going to be a 3-player market, which by the way, like he said that and then he had to like hit a backtrack and say, well, actually there's other players coming too, which, um, These other players that he's referring to are like Iridium or like this Viasat JV with 2 other random players, because you want competitiveness, right? You want a market where consumers have choice. And so, you know, when you talk about facilities-based, you know, they don't want someone who's a virtual player, like a mobile virtual network operator, you know, just a selling or marketing arm that's reselling stuff from somebody else. But it was very telling when he said that because, you know, and this, this is a key, key aspect of how the deal is being positioned. Amazon said, hey, we are going to try to get our own satellites up in 2028, when in fact they're actually talking about what was already being done, which is Globalstar, the C3 satellites. And then we are planning to work with MNOs and strategic partners. Sure. You're, of course you're going to try, because like, that's, That's like the most profitable and economic way to go about this, right? You're going to want to somehow wrangle T-Mobile away, which by the way, like that would be easy because the exclusivity is done this summer. Although I'm sure Starlink would fight that and probably give T-Mobile a deal, a better deal than 80/20 that T-Mobile's currently on. But it's going to take time. Right? But the press release saying these things is really to accelerate regulatory review because regulators love when you say, I'm going to bring more competition to this market. And as a result, like, please approve my deal. And so, you know, for Chairman Carr to say it's a 3-player race between Starlink, Amazon, and AST, like, that's a huge For me, when I heard that, I was like, oh, that's great. That's like a big point of validation. He's talking about this market being huge. And AST is like clearly on the top of his mind. That also pretty much says like regulatory approval is coming. Who knows when, but it's coming. And then it was funny because like when he said 3-player market, he's obviously saying, I guess, like Globalstar in its current form, Iridium, any number of players are not competitors. And so that told me quite a bit. But you see like some of these trolls on Twitter who are like, well, Amazon, who wants to compete with them? They're going to beat you guys up. And it's like, well, they've got to develop a product first and then they've got to get to market and then they've got to figure out how they're going to sell this product. They got to get through all these technological hurdles. They got to get to regulatory reviews. They've got to adjust the orbits of the constellation. Like, there's a ton of complexity, um, that they've got to get through. And by that time, AST will be, you know, well embedded with many customers globally, uh, with MNOs. Um, and so the, the, the competitive moat is going to be pretty high. Now, Amazon, eventually, of course, they will get to some type of service. And it's not really clear, like, even if they're interested in doing direct-to-device, they can say all these things in the press release and from a regulatory point of view, of course you're going to say those things, but are they really focused on that? I mean, with the S-band part of their spectrum for downlink, they also have this unique authorization where they can repurpose part of it into, for your terrestrial use, which is N53, this band. And so, for example, they can go to an enterprise and say, hey, if you want a private enterprise network, you can just use this band and license it from us and we'll give you equipment. And you can do that. And it's not going to be, I think, conflicting with their current MSS business because you can also reuse that spectrum for satellite use. And so within a private network, someone's probably not going to be using their satellite phone. So you're not going to care about the interference, but there's a whole host of applications that could make sense for Amazon. And of course, there is a defensive nature of this deal where Amazon saw potentially that this was going to fall into Starlink's hands and they're like, shit, you know, we might miss this market if we don't make a stand here and at least plant a flag in the ground and get some ownership of spectrum, which by the way, like if we can't build satellites fast enough or if we end up not getting there in terms of technology, you know, these guys over here, AST SpaceMobile, they've got like 3,800 patents and they've been working on this for a long time and And how do we engineer around those patents? Or maybe we pay them royalties, but maybe it's too much trouble. So maybe I'll just go to Abel because we know that Jeff Bezos and Abel Avalon are good friends. We all go to him and say, I can't show my cards right now. I can't tell regulators that this is what I really want to do, but I know in my back pocket a few years from now, once I've kind of gone through some of these motions and made sure, by the way, like this deal closes, I get regulatory approval, then maybe I'll just go to Abel and say, hey, you've got that mid-band Block 3 constellation up there. Can I, can you light up my spectrum for me and I'll pay you for it? And then of course, some of the MNOs might be like, well, no, we don't want Amazon in here. And then Amazon could say, well, hey, you know, I'll let you guys use it too as part of your service, as part of my like buy-in to work with you guys. And so maybe that'll work. And so I think, you know, there's some folks who are who have alluded to this, wondering if it's possible. And it certainly is possible. I mean, anything's possible. Like you tomorrow, you know, Google might wake up and be like, I need to be in this business, which I don't think they think that way. They just care about selling, you know, phones and more devices. But as they move into AI data centers and need to have a presence in space and, oh, this company AST, like we're already working with them. we have a strategic investment. They're very important to our mobile business and internet of things. And then they have all the IP around what I need to do for AI data centers in space. Maybe I should just buy these guys. Like that can happen tomorrow too, right? Like it, people kind of think about the competitive landscape for these highly innovative, innovative, like areas as being very static where they don't change. No, these things change all the time. Like if you, If you're in the boardroom of Google, like you clearly had a look at Globalstar and you clearly know who ASD SpaceMobile is and you clearly know what Starlink's doing and what a big threat SpaceX is with xAI and data centers. And so on the strategic list of, you know, when bankers go in, they present to the board and there's like strategic options in order to counter some of these moves or be innovative or thinking ahead, AST SpaceMobile is on that page of like strategic options. I guarantee you it is. Having been a former banker, like I would put it on the page. And like, hey, this AST SpaceMobile, it solves your direct-to-device connectivity, edge computing connectivity. It also allows you to really go headfirst into data centers in space because they've got all these patents around like heat dissipation and Yeah. I mean, just, you know, high power in space, 100 kilowatt satellite. I mean, it's all there. Now, is Isabella a seller? No, he's not a seller today. Is, that's my belief. But if things change in the future, could he be a seller? Or, you know, if Google makes him an offer he can't refuse and gives him like autonomy to keep building out this dream, then it could be possible, right? Like, And what price would that take? I don't know, $200, $300, $400. I would be, obviously I want to see the company get through further development and into service and achieve on its own, like $300, $400, $500 within the next year or two. But at the same time, like if Google risk adjusted gives you all cash for, you know, $300 today, like that would probably be a hard offer to refuse, but that's certainly possible.
[00:37:28] Speaker B: Right.
[00:37:29] Speaker C: And so, um, yeah, I just want to make sure like people understand that this Amazon boogeyman Globalstar is, is very, very far out. Now the noise is going to be there and the overhang is going to be there, but on the flip side, the awareness and interest is going to be there. I think people like forget what, you know, on the one hand, Starlink, when they announced this plan with T-Mobile, the stock, I remember AST was like, Gosh, it was like single digit, single digits, and it dropped. And of course everybody was like deflated and my you know this sucks. Like we had this like great path to to the the promised land, but now Starlink is here and we've got to battle all the FUD. But on the flip side, like it brought education and awareness to the market, right? And it's like oh this guy Elon Musk, like he's he's entering into this market. He doesn't enter into small markets. Like he's not. Putting up a lemonade stand, like he enters markets that are liquid billions of dollars of potential, right? And so he entered the market. Apple entered the market with a with a half baked idea, but they did. And and so while most people are like, oh, I loathe the day that that happened, that actually was a positive. I mean, remember like when Elon Musk, you know, got into a fight with with Trump and and of course like European countries, like AST Space Mobile rallied. Like anything that was non non-Musk-related rallied, right? Because, and then the US government, and, you know, we haven't even talked about the government business, but the US specifically said like, hey, in the future, we've got to diversify our suppliers. We can't rely on only SpaceX. We've got to like bring in other companies. And that was a huge positive catalyst for AST. And so I think obviously, you know, the pain is near and dear. It's You know, we dropped from the 90s to, we're at 85 today. And like I said, like it's going to take 2, 3 days for this market to digest this news and the tourists and the weekends, they're going to get pushed out and then they're going to be buying back in at like 120, 130 in just what, a few days, weeks? Because like people forget, like everyone's just so focused on this Amazon boogeyman, which again, is not for another 5, 4 or 5 years at best. Um, and so if, if some guy at Deutsche Bank is doing a DCF model, it's like, oh, margins are compressed by 15%. Yeah, maybe in out years. And by then, like, the market is so massive, it really doesn't matter. Um, but then let's think about like the here and now. So we've got a launch, uh, that long delay, but it's going to happen. A launch of Bluebird 7 on Blue Origin New Glenn 3. Like, that's this weekend. It's not, it's not A month from now. It's not from a year from now. It's this weekend. And then you've got, after that, you've got the first batch shipment of Block 2 composite Bluebirds. I mean, the first ever composite Bluebirds, that's going to happen within the next, what, 1 or 2 weeks? And then that's going to go up on a Falcon 9, which is going to happen in May. And shortly thereafter, I don't know how quickly after, but there's going to be another batch of 3. They're going to be shipped down to Florida, and that's going to be on another, uh, Falcon 9. And then you've got, um, from our due diligence, which, um, for those that saw some of the posts about an Antonov, um, An-124 coming from India, we believe that that dropped off a batch of composite rings, the newer reinforced ones. Uh, and this will be for Bluebirds 14, 15, 16, 17, 18, 19, 20, 21, because I think there's probably 8 rings that were unloaded. Perhaps 8 to 8 to, sorry, perhaps 6 to 8. Um, and so those, those are going to be integrated with their microns, um, and the rest of the good stuff and then tested and shipped out probably the first batch of those, probably sometime in May. And so, um, the people who are, you know, whining on Twitter, it's like, woe is me, stock's at 85. Um, I saw some guy who was like, oh, I've lost a few hundred thousand dollars and, you know, Abel, please like put out a PR. You've lost nothing. Like you've lost money if you sell it and you recognize the loss. But if you're not, I mean, this is like, this is just bread and butter of AST. Like this level of volatility, this is just normal course. Like you're going to have FUD or you're going to have people misunderstanding things or just the regular machinations, the volatility of the markets where, you know, if I ran headlines or I don't know, like all space stocks, by the way, most of them were down yesterday. There's like some mixed performance today. I guess quantum and nuclear are like the hot things again, which is fine. Like that's, that's the nature of the beast, right? But, you know, I'm going to talk a bit more about this in Emet Space later at 5 PM today. But I mean, space is where you want to be invested because you've got commercial, absolute 100% commercial focus, launch communications, data centers, Earth observation, all that stuff. And then you've got defense, like you've got commercial and defense piling in dollars, right? And whether it's the conflict in Iran or this move to AI data centers in space, this is where all the investment dollars are going. And you want to be invested in leaders. I know there's like these smaller companies that have done well and they're all like trading vehicles, but you need to own AST. And you're going to have periods of time where you're going to have a drawdown. And then, you know, we're clearly going through a digestive period where people are internalizing the news. And if there's, I don't know if there's that many smart institutions, but if they peel back the layers of the onion and understand Amazon, what that means competitively and when they can actually get to market, It's a nothing burger right now. It could have some impact in 5 to 6 years, but it's not, you know, and there's going to be along the way, there's going to be like presentations by the company and some announcements and some movements at the FCC. So we'll learn more, but that's a long time away.
[00:43:40] Speaker B: Right.
[00:43:41] Speaker C: And so the company, as we've stated before, like they're in a race against themselves. So they've got to get this service up and running, which by the way, like Block 2 Bluebirds, That service is what Starlink is trying to push is not, you know, for V2 is not going to be even at the level of Block 2 satellites for AST. And so it's truly a one-of-one service where there aren't any real competitors out there for the company, not for the near term, not for the medium term, probably not for the long term, as long as they execute. Right. And so that's a key thing, but we're on this We're on the precipice of execution. Like this launch campaign is finally getting going. And so, yeah, I mean, I think for a number of people who are on Twitter, have some self-respect, man. Like I understand your exasperation and of course me too. Like there are times when I get frustrated, but have some respect for yourself, man. Like if you need therapy, Go seek private help by you know going out in the public and making appeals to management, and you know beating beating up on other people, or I don't know what it is like trying to be toxic and and trying to make other people kind of follow your negativity. Go outside, touch grass, do something like ask yourself like why you're investing in the company. Go through. your thesis, see if you feel comfortable with it. If not, then sell the stock, right? But I think, you know, the reason why I say this is like, I remember in April of 2024 and leading up to that when we had an all-time low, there were so many people that were negative that owned stock and were telling people like management are awful and, you know, providing they were spewing so much negativity and yet they held on. Right? But they were on Twitter daily spewing negativity where it actually forced some people who I knew to sell at the bottom. And then of course, like, you know, the big news came out, AT&T commercial agreement was signed, Verizon came in, game-changing. And then, um, all the people who sold out, they lost out on— they not only recognized massive losses, but they lost out on all the upside while these people were spewing so much negative stuff. They actually held on. And they ended up doing really well. And I will never forget like some of those people where it's like in the back of my mind, you guys don't deserve that, man. Just like causing all this like mental anguish and heartache for people and causing some people to lose money and yet you held and then you benefited from that. Anyway, enough ranting, but yeah, for those people who are having a tough time, like speak to loved ones, go outside, ride a bike, Lift weights, go swimming, go touch grass. Stop, you know, stop watching every tick of the stock price. Um, if that's what you're, you're focused on, you know, day-to-day stock price movements, um, and you're getting upset like the stock is down, maybe you're too big. Maybe you should sell some shares and you, you know, be in a position where you don't worry about the day-to-day swings. I mean, for me, as I've mentioned before in the past, like, um, you know, I, I've sold some portion of my stock Or warrants previously, and then stock at various times where I don't really care about the stock anymore because like financially I'm fine and then everything else is just gravy. And so if the stock is up to $130 or if it's down to like $80, I'm really indifferent. Obviously, like when it's at $130, I'm quite happy and maybe I'll like order extra few things at the restaurant. And then when it's down to $80, I might be a little grumpy to my wife and kids. But I quickly get over that because I've saved enough and earned enough where it's like, it doesn't matter. So anyway, that's my space. I think hopefully this has helped people and I'm going to be doing a space with Amit on his YouTube channel at 5:00 PM today. So we'll talk about some of this stuff, the SpaceX IPO, Amazon. And by the way, like this was an interesting You know, data point, Amazon traded up on the announcement of this deal, $120 billion in market cap. So what does that tell you about the opportunity? Like Elon Musk is spending $23 billion on spectrum and, you know, Jeff Bezos just spent $11 billion, or actually it's probably not fully Jeff Bezos, it's the guys who are running Amazon. But they spent $11 billion to get into this and, you know, their stock traded up In terms of market cap, $120 billion. While the legacy consultants tell you like there's not much of a market or opportunity here, the market and actual industry participants who are highly strategic and think long-term are telling you vastly different, like the exact opposite. Like this is the place where you want to be. And, you know, obviously the SpaceX IPO, all the meat is in Starlink. Right? And all the growth for Starlink is in direct-to-cell. So follow what the big guys are doing. Forget the naysayers and the guys who haven't done anything in their lives except criticize what other people are doing. But anyway, I'll end it there and thanks everyone for joining and we'll talk again soon. Take care.
[00:49:05] Speaker A: Thanks for listening to the AST Space Mover podcast. If you enjoyed This episode, and you'd like to help support the podcast, please share it with others, post about it on social media, or leave a rating and review. To catch all the latest news about AST Space Mobile, make sure to subscribe. Thanks again, and I'll see you next time.
[00:49:28] Speaker B: We're doing something very, very big, and I think with this technology, we can really affect billion lives. AST Space Mobile is We are the only company that has proven technology to deliver cellular broadband connectivity directly from space to the everyday smartphone. People will just basically turn on their phone and be seamless regardless of where you are. We don't want the user even to know that it's connected by satellite. Our role is to bring this into reality, always in partnership with the MNOs. Listen.
[00:50:04] Speaker C: Mmm, waffles.